India, a critical part of our global plan: Intel CFO

Computer chip-maker Intel, which is the leader in India with more than 80 per cent market share, wants to further expand its business here.

The company had recently forecast that 40 million tablets would be sold worldwide next year. In an interview with Business Line , Stacy Smith, Global Chief Financial Officer of Intel, shares views about the so-called ‘Internet of things’ (devices connected to the Internet) and its future in India. Edited excerpts:

What is Intel’s role in the ‘Internet of things’?

From the stand-point of the overall drivers of technology, it’s a fascinating time in the industry as well as at Intel. If you zoom out, what we are seeing is there is an explosion of devices that are computing and connecting to the Internet.

It really isn’t anything like I have seen in my 25 years in the company.

It ranges from high-end computers, ultrabooks down to tablets and other devices in the Internet of things – from deeply embedded devices to cars to wearable devices. So, in the next five years, ‘Internet of things’ will be the key component of our competitive landscape that will take our manufacturing leadership and targeting our designs for all of these devices computing and connecting to the Internet and participating in the growing markets.

How important is the Indian market for Intel?

India is a critical part of our worldwide plan. Our largest development sites would be the US, Israel and India and from that stand-point, it is a critically important market.

From the markets’ stand-point, India is and has a great potential.

It’s also a market which has underperformed the potential – penetration of technology. It has underperformed relative to places such as China, Brazil and Russia. But in the next five years, we will see lot of growth, penetration of technology.

There is lot of broadband penetration and digital literacy initiatives happening and these kinds of initiatives will set the stage for a robust economy, and ultimately, business opportunities for companies such as Intel.

We also have a lot of ambitious plan with the Government like the National Optic Fibre Network project, which will lead to more people connected and access to technologies.

The Indian Government has announced subsidies for manufacturing fabs (fabrication units) here. What is Intel’s position when it comes to manufacturing in India?

India is our largest non-manufacturing site.

So, we have 6,000 direct employees and indirect employees pushing close to 10,000.

It is interesting to look at what has happened in India over the last decade.

The activities that we do here is not manufacturing, it is actually what we call higher value-added products. It is here (India) that a part of our worldwide team does development on the highest end processors that we have. Specific to manufacturing, we do not have plans to do so in India as we are not adding manufacturing sites right now.

Generally, when we look at manufacturing, the criteria that we use or look at how we add capacity is first and foremost the cost.

Second is the infrastructure as we tend to be in a place where we do multiple generations of technology – it’s the IT infrastructure, the power grid and all that kind of things.

The third is the ability to hire and retain high-end technical talent.

With the devices becoming smaller, how do you work on pricing of your products?

In some of the mobile devices, there are cutting edge process technologies, which are powerful and cost-efficient.

Because of some of the technologies available, we can continue to derive cost per transistor down and, therefore, we have cost, power and performance advantage as compared to competitors.

COMMENT NOW